CAMEO CURTAINS, INC. vs. PHILIP CAREY CORPORATION & another; [Note 1] UNIVERSAL ROOFING AND SHEET METAL CO., INC., third-party defendant.

KASS, J. Philip Carey Corporation (Carey) was the manufacturer of roofing materials which Universal Roofing and Sheet Metal Co., Inc. (Universal), installed in 1968 on a building belonging to the plaintiff Cameo Curtains, Inc. (Cameo). The roof failed. Cameo brought an action against Carey, which, in turn, brought Universal in as a third-party defendant.

The action against Carey was based on alternative theories of negligence and breach of warranty. A jury returned a general verdict for the defendant Carey on the negligence aspect of the case, thus effectively relieving Universal of liability. On the implied breach of warranty count, the jury returned a verdict for the plaintiff of $11,740. The judge also addressed special questions to the jury and, in reply to these, the jury found that the first time Cameo knew or might have known that the roofing materials were defective was February, 1973; that Cameo's injuries occurred on various occasions from 1969 through 1975; and that Cameo sustained damages on May 15, 1975.

Following the jury's return of the general verdict and answers to special questions (see Mass.R.Civ.P. 49(b), 365 Mass. 813 [1974]) on the claim of breach of warranty, Carey moved for judgment notwithstanding the verdict. The trial judge did not rule on the motion; instead, acting under G. L. c. 231, Section 111, and Mass.R.Civ.P. 64, 365 Mass. 831 (1974), he reported the following questions:

(1) "Is the plaintiff's cause of action barred by the statute of limitations?"

(2) "Was sufficient notice of the alleged breach of warranties given by the plaintiff to the defendant within a reasonable time?"

(3) "Is the lack of privity of contract between the plaintiff and the defendant a bar to recovery by the plaintiff?"

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Whether the jury might have found that Carey's materials were defective is, therefore, not in issue; [Note 2] the controversy is over whether Cameo made its claim in a timely manner and whether Cameo's relationship to Carey was such as to cause the latter to be liable to Cameo.

1. The timeliness of Cameo's action. Cameo filed its action on November 19, 1975. Although a leak had occurred in 1969, shortly after Universal had installed the roof, the jury found that it was not until February, 1973, that Cameo became aware that the roof materials were defective.

In Hoffman v. Howmedica, Inc., 373 Mass. 32, 34-35 (1977), the court traced the legislative evolution of G. L. c. 106, Section 2-318, that section of the Uniform Commercial Code which excludes the defense of privity in any suit against a manufacturer by a person whom the manufacturer "might reasonably have expected to use, consume or be affected by the goods." The two most recent amendments to Section 2-318, those made in 1973 and 1974, are pertinent. The 1973 amendment (St. 1973, c. 750, Section 1) added a statute of limitations which required that actions under Section 2-318 be brought within two years of the date of the injury. The 1974 amendment (St. 1974, c. 153) extended the period to three years "after the date the injury and damage occurs" (emphasis added). We read the addition of the words "and damage" which the Legislature added in 1974 as extending the beginning of the limitations period from the time when the injury is first perceived to the time when the damage flowing from the injury can fairly be estimated. [Note 3] In the instant

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case, the date which the jury found to be the date when the damage occurred was May 15, 1975.

Since the suit began about six months later, it fell comfortably within the three-year statute of limitations established by St. 1974, c. 153, unless the 1974 act was not applicable to a sale made in 1968, i.e., well before the effective date of the act. That question was answered in Hoffman v. Howmedica, Inc., 373 Mass. at 35-36, which held that the amendments effected by the 1973 amendment were applicable to injuries which occurred after the effective date of the act, even though the sale had occurred before that date. Although the court in Howmedica relied primarily on St. 1973, c. 750, Section 2, which expressly made the substantive amendments applicable to injuries after the effective date of the act, the court also took into account the apparent purpose of the Legislature in "deemphasizing the `sale' transaction" and looking "instead to the harm which may result from defects contained in items in commerce which may cause injury to the class of plaintiffs specified in the statute." Hoffman v. Howmedica, Inc., 373 Mass. at 36. The same reasoning applies to St. 1974, c. 153, of which the court was aware in the Howmedica case. See 373 Mass. at 35 n.3. See also Swartz v. General Motors Corp., 375 Mass. 628, 630-631 (1978); compare Mansfield v. GAF Corp., 5 Mass. App. Ct. 551, 555-556 (1977), in which the injury occurred prior to the enactment of the 1973 amendment. We conclude that Cameo brought its action within the limitations period built into Section 2-318. This would be so even if the time had been calculated from the time of injury alone, since the jury found that injury had occurred as late as 1975.

2. Adequacy of notice of the alleged breach of warranty. Our resolution of the first question posed by the trial judge -- that because Section 2-318, as amended through St. 1974, c. 153, applied to Cameo's damage notwithstanding the earlier sale and that the action, therefore, was not barred by the statute of limitations -- governs our decision of the second question, viz., whether Cameo gave Carey adequate

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notice of the alleged breach of warranty. The text of Section 2-318 includes the sentence, "Failure to give notice shall not bar recovery under this section unless the defendant proves that he was prejudiced thereby."

The jury found specifically that Cameo could not have known the roofing materials were defective until February, 1973. There was evidence that Cameo notified Carey at once in writing and, indeed, was persistent in calling upon Carey to make repairs. Carey attempted to make repairs, as it was bound to do under the terms of a bond it had sold to Cameo wherein Carey pledged itself to make repairs to Cameo's roof for twenty years. [Note 4] The repair efforts were not successful. Because of the express provision concerning notice in Section 2-318, there is no occasion to consider the applicability of G. L. c. 106, Section 2-607 (3) (a). Compare Sullivan v. H.P. Hood & Sons, 341 Mass. 216, 224 (1960), construing a predecessor section of Section 2-607. In the absence of delay in notice, there is no question of prejudice by reason of delay.

3. Lack of privity. Does the lack of privity bar recovery? It does not. The fundamental purpose of Section 2-318, as amended, is to eliminate lack of privity as a defense in a breach of warranty action. See Hoffman v. Howmedica, Inc., 373 Mass. at 34-36; Swartz v. General Motors Corp., 375 Mass. at 630-631; Wolfe v. Ford Motor Co., 6 Mass. App. Ct. 346, 357 (1978). Compare Necktas v. General Motors Corp., 357 Mass. 546, 549 (1970).

As to the first and third questions posed by the judge in his report, we answer: no. As to the second question: yes.

The motion for judgment notwithstanding the verdict shall be denied, and judgment is to enter in accordance with the general verdict of the jury.

So ordered.